Erate Update: Calnet 3 Contracts Are Announced

By Fred Brakeman

Great news! The State of California Department of Technology recently announced the signing of several Calnet 3 contracts on November 15, 2013. Even better news is that there are more services offered under Calnet 3 and more vendors as well. Here’s an overview of the new services and contracts:

Big Change to Contract Terms

The old Calnet 2 contract required agency holders, once they started a class of service (i.e., T1 lines or Centrex lines), the agency was required to keep those services for a minimum of two years or early termination fees were assessed. Early termination fees have been eliminated in the new Calnet 3 contract. Now, services can be cancelled without paying early termination fees after giving the vendor 30 days written notice.

Five of the six contracts are for five years with two one-year voluntary extensions. The sixth contract is for four years with three one-year voluntary extensions.

Better Pricing

While there is not a huge difference in pricing between Calnet 2 and Calnet 3, for most services, the pricing went down slightly. Others went up slightly. The good news is there are quite a few more services now offered under Calnet 3 that have never been offered before. Since Calnet contract prices are about half of tariffed rates, it is our suggestion that agencies who have a current Calnet 2 contract switch over to Calnet 3 as soon as possible.

New and Existing Services

Category 1.1 – Dedicated Transport

DSO, DS1 and DS2 service and ISDN Primary Rate Interface Service

Contract holders are AT&T and Verizon

Category 1.2 – Multi-Protocol Label Switching (MPLS)

MPLS, Converged VoIP, Converged Voicemail, Audio Conferencing, and Session Initiated (SIP) Trunking Service

Contract holders are AT&T, Integra, Jive, NWN and Verizon

Category 1.3 – Standalone VoIP

Standalone VoIP, VoIP Voice Mail, and Audio Conferencing Services

Contract holders are AT&T, Integra, Jive and Verizon

Category 1.4 – Long Distance Calling

Long Distance Network, Long Distance Domestic Calling, Calling Cards, Operator  and Audio Conferencing Services.

Contract holders are AT&T and CenturyLink

Category 1.5 – Toll Free Calling

Toll Free Network Toll Free Domestic and International Toll Free Services

Contract holders are AT&T, CenturyLink and Verizon

Category 1.6 – Legacy Communications

Business Access (POTS), Central Office Exchange, Central Office Exchange, Intra-LATA Calling, Locally Based Automatic Call Distributor (ACD), Voice Mail, Analog Service, ISDN Basic Rate Interface (BRI) Service, Frame Relay Service and Asynchronous Transfer Mode (ATM) Service

AT&T is the only contract holder for Category 1.6

Erate and Calnet 3

So, what are my minimum requirements if I want to apply for Erate funding and switch over to Calnet 3? You have two options:

Option 1:

If the applicant files an FCC Form 470 and considers a state master contract as one of the bids:

• The applicant must follow a competitive bidding process pursuant to FCC requirements and state and local procurement law. Price must be the primary factor – that is, it must be weighted more heavily than any other factor.
• If the applicant selects the state master contract as the most cost-effective alternative, the applicant is required to follow the applicable provisions of the state master contract, state contract law, and state and local procurement laws. The signed state master contract between the state and the service provider meets the FCC signed contract requirement.
• The applicant cites its own FCC Form 470 on its FCC Form 471

Option 2:

Mini-bids

If the state awards contracts to multiple vendors as a result of its posted FCC Form 470 #3354700001069064 and competitive bidding process, the applicant must conduct a bid evaluation for all vendors able to provide services to the applicant under these contracts (a “mini-bid”). To conduct a mini-bid, the applicant determines the factors to use for its evaluation – with the price of the eligible products and services as the most heavily-weighted factor – scores the vendors appropriately, and chooses the most cost-effective solution.

• The applicant does not need to post an FCC Form 470 to conduct a mini-bid.
• The applicant does not need to conduct a mini-bid if only one vendor is able to provide service. For example, if three vendors sign contracts with the state pursuant to the state-filed FCC Form 470 but only one of the vendors can provide service in the applicant’s geographic location, a mini-bid is not required.

If you want more information regarding the Calnet 3 contract, go to http://marketing.dts.ca.gov/calnet3/

About the Author

Fred Brakeman is President of Infinity Communications & Consulting, Inc., a full-service consulting firm including Erate/CTF and Microsoft Ed Tech K-12 consulting, technology design services, and low voltage construction management and inspection services serving approximately 25 percent of all the school districts and county offices of education in California. Infinity Communications & Consulting is located in Bakersfield, California with field offices in Hollywood and Fresno. He can be reached at fbrakeman@infinitycomm.com, office phone (661) 716-1840, or via mail at P.O. Box 999, Bakersfield, California 93302. Please visit www.infinitycomm.com.